Prestige sumer Healthcare (US:PBH)2023-08-05 12:53Financial Data and Key Metrics Changes - Q1 revenue of $279.3 million increased by 1.8% organically compared to the prior year, with EBITDA and EPS both slightly declining from the previous year, but EBITDA margin remained consistent with long-term expectations [2][3][12] - Total company gross margin was 55.4% in Q1, which increased sequentially but declined by 240 basis points year-over-year due to cost increases, partially offset by pricing actions and cost savings [5][7] - Diluted EPS for Q1 was $1.06, down from $1.09 in the prior year, impacted by cost increases and higher interest rates [7] Business Line Data and Key Metrics Changes - North America segment revenues increased by 1.8% and International segment revenues increased by 1.6% year-over-year, excluding foreign exchange effects [3] - The largest growth drivers in Q1 were gastrointestinal (GI) and skin care categories, with notable performance from Dramamine [4][42] Market Data and Key Metrics Changes - The international business, excluding FX, was up slightly as anticipated, with an outlook for mid-single-digit growth for the full year [18] - E-commerce channel continued to show year-over-year growth, reflecting a long-term trend of higher online purchasing [4] Company Strategy and Development Direction - The company reaffirmed its full-year outlook, anticipating revenue of $1.135 billion to $1.140 billion and organic revenue growth of approximately 1% to 2% versus fiscal '23 [12] - The company plans to continue investing in brand-building and maintaining a disciplined capital deployment strategy, focusing on reducing debt and building M&A capacity [75][78] Management's Comments on Operating Environment and Future Outlook - Management noted that inflation is largely wage-related and expected to remain consistent, with some relief on certain costs such as freight [16] - The company expects gross margin to remain consistent throughout the year, with Q2 estimated to be similar to Q1 [5][81] Other Important Information - The company generated $46.6 million in free cash flow in Q1, down from the prior year due to timing of working capital [8] - Approximately 425,000 shares were repurchased for $25 million, completing the previously authorized share repurchase program [9] Q&A Session Summary Question: Dynamic between units and pricing and cost normalization - Management indicated that for fiscal '24, they expect about 1 point of growth from price and 1 point from volume, with Q1 growth primarily from pricing [15][16] Question: Performance of Hydralyte in international business - Management stated that the international business, excluding FX, was up slightly as anticipated, with a return to historic growth levels expected [18] Question: Inventory levels at retail - Management noted that inventory levels have been consistent over the last few quarters, with no significant areas for restocking [19] Question: Women's health category outlook - Management anticipates stabilization and long-term growth for the women's health business, despite a year-over-year decline in the quarter [23][24] Question: Cough and cold category performance - Management expects more normalized trends in cough and cold sales, with inventory levels being filled at the retailer level [25][26] Question: Channel shifts and potential risks - Management observed some movement in shopper preferences but noted that they are well-positioned across all channels [27][29] Question: Advertising and marketing focus - Management confirmed that advertising and marketing resources are allocated based on opportunities and new product launches, with no significant changes in strategy [51][83]